James Bilsborrow, a Weitz & Luxenberg partner and practice group co-chair, is speaking at a virtual event titled “PFAS Litigation and Regulatory Developments Conference.” It…Read More
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Before the April 20, 2010, BP oil well blowout that unleashed the largest oil disaster in U.S. history, the 2-½-mile-deep Macondo well in the Gulf of Mexico had gotten the reputation among some crew members as “the well from hell.”(1)
But just 16 hours before the explosion, an engineer who had been dispatched to help sent an email from the Deepwater Horizon drilling rig to coworkers in Houston telling them he had good news: “We have completed the job and it went well.”(2)
Eleven men were killed when the Macondo well — 5,000 feet below the surface of the water — exploded, ultimately spewing an estimated 3.19 million barrels of oil into the Gulf of Mexico before it was capped 87 days later.(3)
Some of the consequences to wildlife were immediately apparent: pelicans became black with oil; fish were seen floating dead in brown sludge; dead turtles washed up on shore while dolphin and sea turtle strandings spiked. Other environmental effects will take years to measure.(4)
Working for Victims
In addition to the environmental catastrophe that resulted from the blowout 42 miles from the Louisiana coastline, hundreds of thousands of innocent people suffered.
Renowned environmental and consumer class action attorney Robin L. Greenwald at Weitz & Luxenberg served as a member of the Plaintiffs’ Steering Committee in the class action litigations, helping to secure full compensation for the victims of the spill.
Drilling for oil in the Gulf of Mexico was dangerous to begin with. In the nine years leading up to the Deepwater Horizon disaster, 60 people had died and 1,550 were injured on the 90 big drilling rigs and 3,500 production platforms where there had been 948 fires and explosions.(5)
But the BP oil disaster did not have to happen. Investigators said the blowout at the well “was not a statistical inevitability.”(6)
Failure of Management
A commission that reported to President Obama about the cause of the BP oil spill concluded that “a number of separate risk factors, oversights, and outright mistakes combined to overwhelm the safeguards meant to prevent such an event from happening. But most of the mistakes and oversights at Macondo can be traced back to a single overarching failure — a failure of management” by BP, Transocean, the owner of the drill rig, and contractor Halliburton.(7)
BP’s “safety culture,” the commission reported, “failed on the night of April 20, 2010, as reflected in the actions of BP personnel on- and offshore and in the actions of BP’s contractors.”(8)
An expert in catastrophic risk management, Robert Bea, testified under questioning from Ms. Greenwald in the trial that “BP management knowingly ignored required process safety management mitigations for blowout source control in deepwater exploration wells.” He continued, “The blowout source control failures resulted from a disregard of the risk of loss of primary containment and an uncontrolled flow of oil and gas from the well.”
As the oil oozed and floated through the Gulf waters, damaging the environment and wildlife, workers from BP and Transocean were joined by thousands of government employees in trying to contain the damage and stop the spill that threatened beaches and coastal ecosystems.(9)
Long before the well was capped, oil started appearing on the shores of Louisiana. Thirty days after the well blew out, oil began infiltrating the Pelican State’s marshes and estuaries, which posed a particular challenge for cleanup and was a threat to young animals.(10) (11)
Effects on the Economy
The spill would affect much of the Gulf Coast’s human population. In Louisiana alone, researchers estimated $32 million in lost visitor spending through the end of 2010, due to the spill.(12)
A survey taken soon after the spill found 21% of leisure travelers less likely to visit Florida, and almost 30% less likely to visit Alabama, Louisiana, and Mississippi.(13)
Aside from the money that flowed from cleanup and containment efforts, the National Oceanic and Atmospheric Administration estimated that between $527 million and $859 million was lost in recreational opportunities, including boating, fishing, and beach visits, because of the spill.(14)
While economic effects have been mixed, the impact on wildlife and the environment has been profoundly negative. For example, dolphins in Barataria Bay were found to be underweight and anemic with low blood sugar and symptoms of liver and lung disease.(15)
NOAA scientists found the dolphin population in the bay decreased by up to 51%.(16)
Researchers also found that up to 84,000 birds were killed as a consequence of the spill, and up to 166,000 juvenile sea turtles perished. They estimated that as many as 5 trillion newly hatched fish died and between 4 billion and 8.3 billion harvestable oysters were lost.(17)
Rare corals and red crabs in an area 400 to 700 square miles around the wellhead were harmed, while 350 to 720 miles of shoreline experienced a reduction in plant cover and vegetation.(18)
Settlement Reached over Gulf Oil Spill
Five years after the disaster, BP reached an agreement in principle with the United States and five Gulf states to settle civil claims against the company for a total of $18.7 billion. It was the largest environmental settlement in the history of the United States and the largest ever civil settlement with a single entity by the Department of Justice.(19)
The settlement included the following financial provisions:
- A $5.5 billion Clean Water Act penalty, 80% of which was for restoration efforts. According to the National Oceanic and Atmospheric Administration, “This is the largest civil penalty in the history of environmental law.”(20)
- $8.1 billion in natural resource damages, plus an additional $700 million to address any future natural resource damages. The $8.1 billion was designated to fund Gulf restoration projects.
- $5.9 billion to settle claims by state and local governments for economic damages.
- A total of $600 million for other claims, including claims for reimbursement of natural resource damage assessment costs and other unreimbursed federal expenses.(21)
This settlement was intended to provide a constant stream of money over the next 15 years to help restore natural resources and improve the economy in Gulf Coast communities affected by the BP oil disaster.
BP, chancing its odds of a reduction to the settlement it already approved, challenged the agreement. Ultimately, the settlement stood, and a new and improved version emerged.
On April 4, 2016, a federal district judge approved “the largest environmental damage settlement” in U.S. history: an astonishing $20.8 billion. Of this amount, 20% was designated for The Oil Spill Liability Trust Fund and 80% was directed to the Gulf Coast Ecosystem Restoration Trust Fund.(22)
The Restoration Trust Fund will be dedicated toward:(23)
- Helping to restore the Gulf’s natural resources
- Improving the economy in the region
- Protecting and revitalizing the Gulf Coast
- Assisting the Gulf states with their own recovery projects and activities
- Supporting research efforts regarding long-term sustainability of the region’s ecosystem for recreational and commercial purposes
- Creating specialized learning centers for science and technology
In addition to Ms. Greenwald, another attorney from the firm’s Environmental Toxic Torts and Consumer Protection Litigation unit served as a key member on the Plaintiffs’ Steering Committee in the litigation against BP. Their efforts helped secure full compensation for hundreds of thousands of people harmed by the BP oil spill.
Their tenacity and commitment amplified a team effort that ultimately resulted in a just verdict against BP. BP was found grossly negligent in its role in the Deepwater Horizon oil spill catastrophe.
Through the dedication of attorneys such as Ms. Greenwald emerged a remarkable and unanticipated outcome: the creation of the Gulf Region Health Outreach Program (GRHOP). Dedicated to improving health care in the Gulf. This program received $105 million in funding through the BP settlement.
This program has joined together four Gulf states and four health-related programs in an effort to create and sustain high-quality health care services and facilities in the Gulf region. It focuses specifically on serving those most directly affected by the oil spill disaster.
The GRHOP is distributing funds over several years to support the following projects:
- Louisiana Public Health Institute’s Primary Care Capacity Project, which will extend and improve state residents’ access to quality health care
- The Mental and Behavioral Health Capacity Project, a consortium of four Gulf states, which is intended to provide behavioral and mental health services for coastal citizens
- The University of South Alabama’s Community Health Worker Training Project, which is charged with training community health workers to assist Gulf residents in understanding and accessing services within the health care system
- Tulane University’s School of Public Health for the Environmental Health Capacity and Literacy Project, which is striving to expand and improve environmental health understanding and knowledge
Class members include everyone who worked to clean up the BP oil spill, as well as people living in specific coastal areas and wetlands of Louisiana, Alabama, Mississippi, and the Florida Panhandle. Target beneficiaries of GRHOP include residents, particularly the uninsured and medically underserved of 17 coastal counties and parishes. Most class members benefit directly from this program.